Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,030, and a profit target at 1,900, S&P 500 index)
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday
(next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes gained 0.1-0.4% on Friday, extending their short-term consolidation along record highs, as investors remained optimistic ahead of long holiday weekend. The S&P 500 index remains close to last Wednesday’s all-time high of 2,005.04. The level of resistance is at around 2,000-2,005, and the nearest important support level is at 1,985-1,990, among others. There have been no confirmed negative signals so far, however we still can see negative technical divergences, accompanied by some overbought condition which may lead to a downward correction:
Expectations before the opening of today’s session are positive, with index futures currently up between 0.2% and 0.3%. The main European stock market indexes have gained 0.2-0.9% so far. Investors will now wait for some economic data releases: ISM Index, Construction Spending at 10:00 a.m. The Institute of Supply Management Index is based on surveys of manufacturing firms, as it monitors employment, production inventories, supplier deliveries and new orders. Investors await higher corporate profits when this index is increasing. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it reaches new all-time high close to the level of 2,005. The nearest important support level remains at around 1,995-2,000, as we can see on the 15-minute chart:
The Nasdaq 100 futures contract (CFD) follows a similar path, as it trades closer to the level of 4,100. On the other hand, the nearest important level of support is at 4,070-4,080, marked by recent consolidation, as the 15-minute chart shows:
Concluding, the broad stock market is expected to continue its long-term uptrend today. However, we remain cautiously pessimistic, maintaining our speculative short position with entry point at 2,005 – S&P 500 index. The stop-loss is at 2,030 and potential profit target is at 1,900 (S&P 500 index).
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
